NVIDIA Corporation (NASDAQ:NVDA) shares closed higher on Wednesday, driven by strength in the chip stock sector.

Former House Speaker Nancy Pelosi (D-Calif.) is one of the most closely watched members of Congress for stock trading activity, largely due to the significant purchases made by her husband, Paul Pelosi. On June 26, Paul Pelosi bought 10,000 shares of NVIDIA, with the purchase valued between $1 million and $5 million. Over the past six months, NVIDIA's stock has surged by more than 161%.

With the recent buzz around Nvidia, some investors may be eyeing potential gains from the company's dividends too. As of now, Nvidia offers an annual dividend yield of 0.03%, which is a quarterly dividend amount of 1 cent per share (4 cents a year).

So, how can investors exploit its dividend yield to pocket a regular $500 monthly?

To earn $500 per month or $6,000 annually from dividends alone, you would need an investment of approximately $19,242,000 or around 150,000 shares. For a more modest $100 per month or $1,200 per year, you would need $3,848,400 or around 30,000 shares.

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To calculate: Divide the desired annual income ($6,000 or $1,200) by the dividend ($0.04 in this case). So, $6,000 / $0.04 = 150,000 ($500 per month), and $1,200 / $0.04 = 30,000 shares ($100 per month).

Note that dividend yield can change on a rolling basis, as the dividend payment and the stock price both fluctuate over time.

How that works: The dividend yield is computed by dividing the annual dividend payment by the stock's current price.

For example, if a stock pays an annual dividend of $2 and is currently priced at $50, the dividend yield would be 4% ($2/$50). However, if the stock price increases to $60, the dividend yield drops to 3.33% ($2/$60). Conversely, if the stock price falls to $40, the dividend yield rises to 5% ($2/$40).

Similarly, changes in the dividend payment can impact the yield. If a company increases its dividend, the yield will also increase, provided the stock price stays the same. Conversely, if the dividend payment decreases, so will the yield.

NVDA Price Action: Shares of Nvidia gained 4.6% to close at $128.28 on Wednesday.

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